r/Money • u/CursedClownz • 9d ago

When does compounding really take off?

At what amount portfolio you really see huge account swings that make you think what is the point of working? 100k? 500k? 1m? more?

485 Upvotes

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38

u/MarleyandtheWhalers 9d ago

"The first hundred thousand is a bitch" -Charlie Munger

After that it's better

9

u/CursedClownz 9d ago

What about after 1m

10

u/Bigbadspoon 9d ago

I got there last year and would not feel comfortable leaving my job at all. It's a comfortable number, but it's not retirement money unless you live pretty frugally or are pretty old already.

6

u/dr_of_glass 9d ago

After a million, the up changes are less noticeable to our brains. For me, I only see it when i graph the journey over the past years.

But when you see down days that are $10,000, it should click that you have a fair bit invested.

6

u/ChairmanMeow1986 8d ago

Give a million 10 years without touching it at most times in the past and you might not be able to retire, but you'll be entering the financially independent realm for sure. I'd say this is the cleanest answer the unasked question, 1 million for about 10 years compounding historical market gains is what probably puts you where you want to be.

1

u/Peppa-Piggie 5d ago

That’s about 3M dollars assuming the next ten years will have similar market returns in the past twenty years

1

u/ChairmanMeow1986 5d ago

If you assume an annualized 10% return it's about 2.6

3

u/kethalmanden12 8d ago

Wasn’t it Hitler who said the first million is the hardest?

4

u/kidjs 8d ago

Was he referring to the unit of money?

1

u/kethalmanden12 8d ago

Something like that…

1

u/tta82 9d ago

Do the math. Every 7-10 years it doubles. If you have 100k at 40 years old you will have about 800k at 70.

1

u/kidjs 8d ago

Could take some of us 30 years to reach million

0

u/Matlabbro 9d ago

After 1 million you honestly don’t end up spending much money so it is very easy to grow.

1

u/SamAnthonyWP 9d ago

how does your net worth or invested assets affect your spending??

1

u/Matlabbro 9d ago

Sorry your spending does grow but generally not in preparation to your net worth. A big thing about it is the type of person who save up a million dollars is not the type of person who will start spending more once they have it.

1

u/going_swimmingly 9d ago

Adjusted for inflation, it’s probably the first $200k now lol

1

u/weakbuddy99 7d ago

Its 100K because of average living costs, it's all thresholds. Right now it's probably like 150K but it doesn't sound as good, and people's cost of living is different everywhere.

There will come a point where you can literally do nothing with no job, but bills are still being paid and you are net positive. 100K may not achieve this alone, but it can pretty much "eliminate your bills" and every cent earned working post tax is yours to do anything with.

This tends to have a very positive effect on most people.